Finding Text
Finding 2024-002 – Material Weakness – Inadequate Documentation Federal Program: U.S. Department of Treasury, Coronavirus State and Local Fiscal Recovery Funds – Assistance Listing Number 21.027 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria All expenditures charged to federal programs must be clearly and completely supported by required documentation that agrees with amounts in the Corporation’s general ledger and periodic reports to the federal grantor in accordance with 2 CFR Section 200.403(g). Condition We selected a sample of both payroll and nonpayroll related expenditures for controls and compliance. During our testing of payroll expenditures, there were five instances out of eleven in which a timesheet or other documentation could not be located to support a payment made to an employee. During our testing of nonpayroll related expenditures, there were three instances out of eighteen in which an invoice for the selected expenditure lacked proper documented approvals. Cause The primary reason for the above issues is due to the Corporation experiencing turnover at the Chief Financial Officer ("CFO") position and other key positions in the Finance Department, which led to the oversights in the monitoring of the Corporation’s internal controls over compliance in certain instances. Effects Without proper support for payments made to the employees, it increases the risk that an incorrect amount was paid to the employee, or the payment should not have been charged to the major program. Without proper approval of disbursements, it increases the risk of unallowed expenses being charged to the grant. Questioned Costs The total known questioned costs for the payroll expenditures were $3,246. Payroll expenditures are approximately 43% of the total expenditures for this program. There were no questioned costs for nonpayroll related expenditures. Perspective This audit finding is systemic. Statistical Sample A statistical sample was used. Repeat Finding This audit finding is a repeat finding of Finding 2023-002. Recommendation: All employees in the Finance Department and associated with any federal program must be adequately trained in overall federal regulations and guidance as well as other requirements associated with each federal award. All such employees must read the grant-related policies and internal control policies. Management should check to ensure all federal grant expenditures are properly approved and have supporting documentation. View of Responsible Officials Impact has experienced staff turnover which resulted in process challenges. Nevertheless, Impact will take this recommendation and implement revised procedures to ensure that the Finance Department and other pertinent Impact resources receive federal regulations and guidance training, incorporate available systems and technology capabilities available from the technology service providers, and adopt best practices. Finance will schedule regular grant reviews, inclusive of program expenditures. These improvements will be in place by March 31, 2026.